Ahead of Merkel trip to U.S., Germany downbeat on trade tariffs

Ahead of Merkel trip to U.S., Germany downbeat on trade tariffs

BERLIN (Reuters) – Germany expects U.S. tariffs on European steel and aluminium products to kick in on May 1, a senior government official said before Chancellor Angela Merkel travels to Washington to meet U.S. President Donald Trump on Friday.

German Chancellor Angela Merkel attends a session of the lower house of parliament Bundestag in Berlin, Germany, April 26, 2018. REUTERS/Axel Schmidt

Trade will be a major topic for discussion at the meeting, before an exemption from U.S. tariffs on steel and aluminium imports granted to the European Union expires on May 1.

“From today’s point of view, one has to expect that the tariffs will come on May 1,” the official said, stressing Germany would continue to negotiate on the trade issue and try to reach a broader package across industries.

Merkel’s one-day trip follows a three-day state visit to Washington by French President Emmanuel Macron.

Macron called on the United States not to abandon a multinational Iran nuclear deal as Western envoys said Britain, France and Germany were nearing a package that seeks to persuade Trump to save the pact. [nL8N1S25ZK]

Trump has described the 2015 accord, under which Iran agreed to curb its nuclear activities in return for the lifting of economic sanctions, as the worst deal ever negotiated and has threatened to wreck it by reimposing U.S. penalties next month unless the three European allies agree to fix its “flaws”.

“The premise of Macron’s proposal is that the agreement remains in its existing form and additional elements come on top,” another German government official said. “In our view this agreement should be maintained.”

Trump may try to seize on a planned Russian gas pipeline running under the Baltic Sea to Germany as a bargaining chip during the talks. The United States sees the Nord Stream 2 gas pipeline as a threat to Europe’s energy security.

Merkel appeared to harden her line on the pipeline project earlier this month, saying: “It is not just an economic issue but there are also political considerations.”

But the German officials defended the project, arguing that Germany was not making itself more dependent on Russia by agreeing to the pipeline.

“Our analysis is … that does not make us more dependent on Russia,” one of the two officials said. “Russia is a very reliable supplier.”

The official also said in an effort to reassure Ukraine, which is worried it will lose earnings from its gas transit pipeline, Germany was trying to help find foreign investors for the infrastructure.

The cautious Merkel has failed to establish a good personal rapport with Trump and the mood music of her visit to the White House is likely to contrast sharply with that of Macron’s “bromance” with the U.S. president. [nL1N1S213F]

“The chancellor is pleased about this appointment because she is a convinced Atlanticist,” one of the officials said. “It is important to cultivate this relationship.”